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Motor City’s Foreclosure Payment Purgatory

Despite programs aimed at reducing property tax foreclosures in the city, around one in four Detroit homeowners owes more in delinquent property taxes than they did three years ago, The Detroit News reports.

Detroit’s plans included payment plans with lower interest rates and an extended five-year repayment deadline, however, the plans have kept thousands in a “payment plan purgatory” that likely will lead to the loss of their homes without more help.

Though officials have praised the plan for keeping homeowners in their homes, and have reduced Detroit's foreclosures from a record high 9,111 occupied homes in 2015 to 514 this year, many have found that the plans simply extend their deadline.

"We are seeing the unintended consequences today,” former Wayne County Chief Deputy Treasurer David Szymanski told Detroit News. “We certainly didn't want it to be a Band-Aid."

In a report earlier this year, Quicken Loans stated that, as of last year, 21% of homeowners were unaware their property was behind on property taxes, and another 61% of renters in tax-delinquent properties were unaware of the home’s tax status.

According to the Quicken Loans, the efforts of the Quicken Loans Community Fund and its Neighbor to Neighbor partners led to 4,136 occupied homes being pulled from the Wayne County tax foreclosure auction.

“As Detroit comes back, we need to do everything we can to make sure those who stayed in our city through good times and bad are able to stay in their homes,” Detroit Mayor Mike Duggan said. “We are seeing real progress in tax foreclosure reductions that impact all of our neighborhoods, and through programs like Neighbor to Neighbor, we will continue this important work in close partnership with the community.”

Detroit is facing other foreclosure issues as well. The city still faces other foreclosure-related challenges. According to GOBankingRates and data from Zillow, 34.4% of homes are currently underwater, and the median home value at the Detroit-Warren-Dearborn metro-area level is $161,300, far below the national median of $226,300. GOBankingRates puts Detroit second on its list of U.S. cities most likely to enter a housing crisis.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.

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